Two and a half years into Javier Milei’s presidency, a Bank of America report seen by Globes says Argentina has achieved striking progress on inflation, exports and currency stability, but economic growth remains weak. The report argues that the country is improving in two key areas, balance of payments and inflation, yet the recovery will take time, according to Matan Lev Ari, Israel’s former representative at the Inter-American Development Bank.
When Milei took office in October 2023, Argentina was heading toward a deep crisis: the budget was out of control, monthly inflation was running at 12.8 percent, almost 200 percent annually, and the economy was shrinking. He answered with his “chainsaw” approach, closing 13 ministries, laying off tens of thousands of public-sector workers, balancing the budget, freeing foreign-exchange trading, removing rent controls and promising foreign investors 30 years of lighter regulation and taxation. Those measures initially worsened inflation and poverty, but now inflation is at an eight-year low, poverty is below its pre-Milei level, exports are at record highs and the peso has been unusually stable.
Bank of America says the export surge is improving Argentina’s current account, attracting capital and helping upgrade credit ratings. Fitch and S&P lifted Argentina’s sovereign rating to B, the highest in many years, though still low by global standards. The country’s risk premium has also fallen sharply, yet remains 4.5 percentage points above U.S. Treasury yields. Argentina, which has defaulted nine times since 1827 and last restructured debt in 2020, is still trying to escape its debt trap.
To help, the World Bank last week offered not a direct loan but a “guarantee” for investors, covering up to $2 billion if repayment problems arise. Argentina hopes to raise $4 billion soon at 5 percent to 6 percent interest, about 4 points below current market pricing, to meet large debt payments due in July and later this year. Exports rose 20 percent between January and April from a year earlier, led by agriculture, up 30 percent, industrial goods and energy, with longer-term potential boosted by investment in oil, gas, lithium and copper.
There is also a cost to the overhaul. Economic output rose only 1.7 percent in the first quarter of 2026 from a year earlier, job creation has slowed, and loan defaults jumped to 11 percent in February and March. Bank of America still expects growth of 3 percent this year and 3.5 percent next year, while inflation is projected to end 2026 at 32 percent and fall to 15.5 percent in 2027. Lev Ari said Argentina still has heavy regulation and is difficult for private citizens and investors to navigate, adding that the country has been stabilized and bandaged, but “the recovery will take a long time.”
